Question:
If Charles borrowed $3900 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$4134
Solution And Explanation
Solution
Given,
Principal (P) = $3900
Rate of Simple Interest (SI) = 3%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3900 × 3% × 2
= $3900 ×3/100 × 2
= 3900 × 3 × 2/100
= 11700 × 2/100
= 23400/100
= $234
Thus, Simple Interest = $234
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $234
= $4134
Thus, Amount to be paid = $4134 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3900
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3900 + ($3900 × 3% × 2)
= $3900 + ($3900 ×3/100 × 2)
= $3900 + (3900 × 3 × 2/100)
= $3900 + (11700 × 2/100)
= $3900 + (23400/100)
= $3900 + $234 = $4134
Thus, Amount (A) to be paid = $4134 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3900, the simple interest in 1 year
= 3/100 × 3900
= 3 × 3900/100
= 11700/100 = $117
Thus, simple interest for 1 year = $117
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $117 × 2 = $234
Thus, Simple Interest (SI) = $234
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $234
= $4134
Thus, Amount to be paid = $4134 Answer
Similar Questions
(1) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 6% simple interest for 8 years.
(2) In how much time a principal of $3200 will amount to $3488 at a simple interest of 3% per annum?
(3) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 2% simple interest.
(4) How much loan did Lisa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6655 to clear it?
(5) How much loan did Deborah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8940 to clear it?
(6) If Michelle paid $5346 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(8) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 9% simple interest?
(9) If Jessica borrowed $3750 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.